A student receives a federally backed student loan of $ 600 at 3.5% interst compounded monthly. After fishing college in 2 years, the student must amortize the loan in the next 4 years by making equal monthly payments.what will the payments be and what total intersest will student pay?please help me! thanks

October 14th 2008, 05:49 AM

TKHunny

How many times have I said this? You MUST learn to use Basic Principles. Draw a map and reason it out.

i = 3.5% = 0.035 <== Monthly interest rate.
Note: I'll just use 'i' in order to make the notation more convenient. Just remember this is the MONTHLY rates of interest.
t = time in years